BB presses banks to incentivise good borrowers

Posted by BankInfo on Tue, Feb 23 2016 10:33 am

The central bank is set to strictly monitor whether the banks are giving rewards to their good borrowers as many of the institutions are reluctant to do so.

In January next year, the banks will have to forward the specifics of the rebates given during 2015 and 2016, said Anwarul Islam, a spokesperson for Bangladesh Bank.

From then on, the banks will have to routinely send details of the rebates extended to their good borrowers, he added.

The central bank introduced the rebate policy in March last year with the view to incentivising the good customers such that they are encouraged to always repay their loans on time.

The good borrowers will be given a 10 percent rebate on their interest payments, as per the policy.

Many of the banks tried to skip the incentive programme, putting up various excuses.

The move to incentivise good borrowers came nearly two months after the central bank approved a restructuring policy for large borrowers, giving them a maximum of 12 years to repay loans above Tk 500 crore.

Besides, the bad borrowers have a long history of not paying their loans on time and receiving interest waiver on their loans along with rescheduling.

But the good borrowers do not get any such incentive.

The BB last week issued a clarification letter to all banks, which stated that a separate provision has to be kept for those who will be entitled to incentive from March 19, 2015 through to December 2015.

After preparing a list of the good customers, the incentive money has to be paid this year.

Zaid Bakht, chairman of Agrani Bank, said the bank has decided to give back a larger amount than what the BB has stipulated.

Agrani will give rebates of up to 20 percent to its good borrowers, according to Bakht.

News:The Daily Star/23-Feb-2016 
Posted in News, Banking